Amazon.com, Inc. (AMZN) is one of the largest Internet retailers in the world. Netflix, Inc. (NFLX) provides

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Amazon.com, Inc. (AMZN) is one of the largest Internet retailers in the world. Netflix, Inc. (NFLX) provides digital streaming and DVD rentals in the United States. Amazon and Netflix compete in streaming and digital services; however, Amazon also sells many other products through the Internet. The sales and total assets (in millions) from recent financial statements were reported as follows for both companies:

Netflix Amazon Total revenues (sales) Total assets: Beginning of year End of year $ 8,831 $135,987 10,203 13,587 64,747


a. Based on your knowledge of each company, identify three major assets used by each company in generating revenue.
b. Compute the asset turnover ratio for each company. Round to two decimal places.
c. Which company generates sales from total assets more efficiently?

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
Asset Turnover
Asset turnover is sales divided by total assets. Important for comparison over time and to other companies of the same industry. This is a standard business ratio.
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Corporate Financial Accounting

ISBN: 9781337398169

15th Edition

Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac

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